Five-Star Business Finance Limited has received an order from the Reserve Bank of India imposing a monetary penalty of Rs 6,20,000 for compliance deficiencies identified during financial year 2024-25.
The RBI Enforcement Department levied the penalty under Section 58G(1)(c) read with Section 58B(5)(aa) of the RBI Act. The speaking order, dated June 18, 2026, was communicated to Five-Star Business Finance via email on June 19, 2026 at 16:00 hours.
Five-Star Business Finance disclosed the development to the National Stock Exchange and BSE on June 20, 2026 under Regulation 30 of the SEBI Listing Regulations. The regulator identified two specific compliance failures.
Five-Star Business Finance had not implemented adequate software for identification and reporting of suspicious transactions. Five-Star Business Finance also failed to disclose its risk gradation approach and the rationale for charging different interest rates to different borrower categories.
The RBI found that Five-Star Business Finance did not disclose the rationale for charging different rates to different categories of borrowers in application forms and sanction letters. The penalty relates to the financial year 2024-25.
Five-Star Business Finance stated the order carries no material financial or operational implication. Five-Star Business Finance said it will take corrective action to address the issues raised by the regulator.
Disclaimer: This article is based on company filings submitted to the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE) and is for informational purposes only. It does not constitute investment advice or a recommendation. Investors should conduct their own research and consult a qualified financial advisor before making investment decisions.